United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS D ROMNEY (of Counsel) Appearing under the Employment Law Appeals Advice Scheme


 


JUDGE PETER CLARK:

1. The appellant, Mr Lloyd Jones, the applicant before the Liverpool Employment Tribunal, commenced these proceedings by an Originating Application presented on 19th April 1999. He contended that he had been employed by a company, ABD Instrumentation and Controls Limited ['ABD'] from 1st March 1982 until it went into liquidation on 13th November 1998. He claimed from out of the fund administered by the respondent Secretary of State a redundancy payment, arrears of pay, pay in lieu of notice and arrears of holiday pay.
2. The claim was resisted on the basis that it was alleged that the appellant was not an employee of ABD within the meaning of s.230(1) of the Employment Rights Act 1996, although it was conceded that the company was insolvent within the meaning of the relevant provisions of that Act.
3. The case was first listed for hearing before a full tribunal sitting at Liverpool on 15th June 1999. However, due to want of time, the case was adjourned and the matter came back before a Chairman, Mr D Reed, sitting alone, on 15th July 1999. On that occasion the appellant appeared in person; the respondent put in written representations.
4. For the purpose of that hearing Mr Lloyd Jones, who is a chartered accountant, had prepared a detailed written submission and had put together a number of documents, all of which have been put before us by Ms Romney who today appears on his behalf under the ELAAS pro bono scheme.
5. The appellant complains that the Chairman took a brief look through the documentation, asked him a few questions without his being called to give evidence on oath and then gave his decision with extended reasons in much the same form as that decision with reasons appears in a document dated 30th July 1999.
6. In his reasons the Chairman made the following findings. That the appellant had been managing director of ABD, a company which became insolvent in November 1998; that company had been established in 1982 and the appellant held all but one of the 3,000 shares originally issued. The number of shares had increased to 13,000 by November 1998 and again the appellant held all but one of them. The Chairman found that the appellant paid tax on a PAYE basis and made Class 1 National Insurance contributions. He had given personal guarantees for the indebtedness of the company and there were periods when he did not take a holiday. He worked full-time in the business and drew a regular salary. He did not have a written contract of employment. He was Chairman of the Board of Directors. There were only two directors and in the event of deadlock he had a casting vote. So far as control was concerned, the Chairman found that in the light of the voting rights of directors not only was the appellant in a position to reverse any decision made by the Board by calling a general meeting, but more significantly, there would never be a position in which his will would not prevail at Board level. If it were necessary and in the course of his written submission, Mr Lloyd Jones drew the attention of the Chairman to the Court of Appeal's decision in Secretary of State for Trade and Industry v Botterill [1999] IRLR 327. In that case the Court of Appeal rejected the judgment of the EAT, Mummery J as he then was, presiding in Buchan and Ivey v Secretary of State for Employment [1997] IRLR 80 which held that a majority shareholder could never be an employee of the company. It is plain that the Chairman took that guidance into account. He said at paragraph 12 his reasons:

"… Certainly, there is no rule that the fact that he was a majority shareholder prevents him from being an employee of the Company."

7. The principal point taken in this appeal by Ms Romney concerns the fairness or otherwise of the procedure adopted by the Chairman sitting alone in this case. She submits that it was wrong for the Chairman do deal so perfunctorily with the detailed written submissions of the appellant; that he should have been given the opportunity to formally give evidence and develop his case, as well as to argue it before the Chairman reached any conclusion.
8. We have had the opportunity to read through the material, which was before the Employment Tribunal Chairman. Having done so, we are wholly satisfied that in his reasons he extracted all the relevant factual information. The question that then arose for him was whether the appellant was employed under a contract of service with ABD or not. That is, essentially, a question of fact for the Employment Tribunal. Having considered the factors, which go either way in this case, we quite unable to say that the Chairman reached an impermissible conclusion. We therefore reject the complaint of lack of fairness. We find that the Chairman reached a permissible conclusion. Our jurisdiction is limited to correcting errors of law. None is made out in this case and accordingly the appeal must be dismissed.